1. The Future of Global Transactions
Wilco Dado
October 2011

2. Financial Crisis, Sovereign Debt Crisis, Recession… Implications for Corporates and Banks.
Risk
From open account to trade finance transactions
Counterparty risk: more demand for bank agnostic channels
Liquidity
Costs
Banks
Not a negative impact on transaction volumes

3. Drivers for Change
“Key drivers for change in payments infrastructures are regulation, greater standardisation, new competition and new technologies.”
(Source: The Changing Face of Payments, June 2011)
Innovation

4. Revolutionary Innovation, Evolutionary Innovation and Disruptive Innovation
Cars
Transactions
Revolutionary Innovation
Evolutionary Innovation
Disruptive Innovation

5. Disruptive Innovation Revisited
Disruptive products are simpler and cheaper
Disruptive technologies are first commercialized in merging or insignificant markets
Leading firms’ most profitable customers generally don’t want, and indeed initially can’t use, products based on disruptive technologies

6. Transactions? What Transactions?
Number of Transactions in 2009
(Source: World Payments Report 2011)
Cash
715 bn (75%)
Banks
21 bn (93%)
1000 bn
Non-cash
260 bn (25%)
e/m Payments
22.5 bn (2.2%)
Non-banks
1.5 bn (7%=
0.2% of the total)

7. The Future of Global Transactions

8. The Changing Face of Payments
Developments most likely to occur:
Automated Clearing Houses (ACHs) will have merged and will offer regional services
Payments processing will be a key business for innovators and new entrants
New payments processors will be more successful than current incumbents
There will be specific payments processing infrastructures for mobile payments
Cheques will no longer be used at all
(Source: The Changing Face of Payments, June 2011)

9. The Changing Face of Payments
Those least likely to occur:
PayPal will be the largest payments processor on the planet
SEPA will no longer be relevant
Core payment systems, such as SWIFT, will have been replaced
Cash usage will have declined to a minimum
Payments will no longer be viewed as a core revenue stream by banks
(Source: The Changing Face of Payments, June 2011)
Ultimately, payments and collections are the lifeblood of all businesses. The transaction banking business clearly gives banks the potential to create strong and enduring bonds with clients.